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Subsidy from Govt., Goods and Services Tax - GST

Issue Id: - 115076
Dated: 14-6-2019
By:- Kaustubh Karandikar
Subsidy from Govt.

  • Contents

XYZ Ltd. receiving subsidy from government on which as understood no GST is payable. In that case, are they required to proportionately reverse the Input Tax Credit taken on common goods and services?

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Showing Replies 1 to 2 of 2 Records

1 Dated: 15-6-2019
By:- Ganeshan Kalyani

In my view no reversal is required.

2 Dated: 15-6-2019

Dear Sir,

I agree with Sh.Ganeshan Kalyani, Ji. The definition of 'Exempt Supply', inter alia, includes non-taxable supply. This does not include 'no-supply or non-supply'.Subsidy is non-supply/no-supply. To qualify as non-taxable supply, it must be 'supply' first in order to fall in the definition of 'Exempt Supply" for the purpose of reversal of ITC. Hence no reversal of ITC at all.


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